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Getting Into Hot Water: Selecting the Right Water Heater

Key Points
  • Water heating accounts for 15% of total energy use in commercial facilities.
  • Several types of water heating technologies and fuel source options are available.
  • Selecting the right system to fit your specific application can reduce operating costs significantly.
water heater

Water heating is a substantial, often underestimated, energy user. In commercial facilities, it accounts for nearly 15% of total energy consumption. For such commercial segments as lodging, health care, and restaurants, water heating represents over 30% of heating costs.

While water heating is considered a mature technology, a variety of options are available. Selecting the right system to fit your application can improve water-heating efficiency and save you energy dollars.

Self-Heating Storage Tank Water Heaters

Conventional storage water heaters operate using electricity, natural gas, oil, or propane. Dual-fuel models are also available. Turning on the hot water tap releases hot water from the top of the tank. To replace that hot water, cold water enters the bottom of the tank, which ensures that the tank is always full. Because the water is constantly heated in the tank, energy can be wasted even when no faucet is on. This is called standby heat loss (the percentage of heat loss per hour from the stored water compared to the heat of the water). Newer, more energy-efficient storage models can reduce standby heat loss significantly, making them much less expensive to operate. Energy Guide labels indicate the annual estimated cost of operating the system and energy-efficiency ratings.

Electric water heaters use resistance heating elements, which makes them very efficient. Typically, the entire tank is insulated to reduce the standby losses. With most gas, oil, and propane water heaters, the burner is located under the tank. Standby losses are greater for these types of water heaters because it is difficult to insulate the tank fully. They also require a flue. Oil-fired water heaters differ in two ways from other fuel-fired models. First, the burner is equipped with an oil pump and a blower that mixes the oil with air for combustion. Second, oil-fired burners typically have larger capacities and smaller storage tank volumes.

Demand Water Heaters

It is possible to eliminate standby heat losses and reduce energy consumption by 20% to 30% with demand or instantaneous (tankless) water heaters. Cold water travels through a pipe into the unit, and either a gas burner or an electric element heats the water, as needed. With these systems, hot water is always available. Potential drawbacks with these heaters include: flow rates may be limited and if they use electric heating elements, high demand charges may result.

To meet hot water demand when multiple faucets are being used, demand heaters can be installed in parallel sequence. Although gas-fired demand heaters tend to have higher flow rates than electric ones, a small amount of energy is necessary to keep the pilot light on.

Heat Pump Water Heaters

Heat pump water heaters use electricity to transfer heat from the air to the water, instead of using electric elements to generate heat directly. Heat pump water heaters can be purchased as integral units with built-in water storage tanks or as add-ons for retrofitting existing water heater tanks. These systems tend to have high initial cost, operate best in moderate temperature locations, and typically require at least 1,000 cubic feet of air space around the water heaters. However, they can be easily retrofitted into existing buildings, equipment is easily changed when needed, and they can utilize energy from waste air streams.

For efficient operation, these water heaters should be placed in areas having excess heat, such as furnace rooms; they do not work well in a cold space. Performance varies based on source and run-time. An understanding of usage patterns is required for correct sizing. Loads with large peaks will require an auxiliary heat source.

Tankless Coil and Indirect Water Heaters

Tankless water heater

A space-heating system can also be used to heat water, such as tankless coil and indirect water heaters. No separate storage tank is needed in the tankless coil type because water is heated directly inside the boiler in a hydronic (hot water) heating system. The water flows through a heat exchanger in the boiler whenever a hot water faucet is turned on. During colder months, the tankless coil works well because the heating system is used regularly. However, the system is less efficient during warmer months and in warmer climates when the boiler is used less frequently.

Solar Thermal Water Heaters

Depending on climate and water use, a properly designed, installed, and maintained solar water heater can meet many commercial segments' hot water needs. Most solar thermal water heaters have two main components, a collector and a storage tank. Otherwise, solar water-heating systems can vary significantly in design. These designs are classified as passive or active and as direct (open loop) or indirect (closed loop).

Passive systems operate without pumps or controls. These units are reliable, durable, easier to maintain, long lasting, and less expensive to operate than active systems. Active solar water heaters incorporate pumps and controls to move heat-transfer fluids from the collectors to the storage tanks. Both active and passive solar water-heating systems often require conventional water heaters as backups.

Distribution versus Centralized Systems

Commercial water heaters can be divided into two categories—distributed systems and centralized systems. Distributed systems have water heaters located at more than one place within a building. Centralized systems provide hot water to the building from a central location.

The choice between systems depends on space requirements, initial cost, operating cost, and peak heating loads. Efficiency and cost in a centralized system are functions of pipe length. Centralized systems with a distance greater than 100 feet from source to point-of-use typically use a circulation system.

Selecting a Water Heater

One of the most important things to consider is peak demand, though fuel availability, initial cost, operational cost, efficiency, service life, sizing, and the hot water demand schedule are also important considerations. To determine the required capacity of the water heater, an estimate of the amount of hot water used for a given period is required.

After the demand estimate is determined, check the peak-hour demand capacity of the water heater, also known as the first-hour rating (FHR). The FHR—a metric for determining water heater size—describes the number of gallons of hot water a water heater can provide in the first hour, which includes the full tank of hot water and the amount of cold water that can be heated as the hot water is used. A good estimate should consider how much water is needed during the most critical, peak demand hours of the day. There is a cost/benefit trade-off between buying a storage tank with a large water holding capacity versus a storage tank with a larger power rating to more rapidly heat the water when needed.

Energy factor (EF) is another important consideration and is based on three factors: recovery efficiency (how effectively the heat from the energy source is transferred to water), standby losses, and cycling losses; the higher the energy factor, the more efficient the water heater (see table below). Water heater manufacturers have sizing tables to help with the decision based on all of these factors.

Energy Factor Comparison
Fuel Source Energy Factor
Electric 0.70-0.95
Natural Gas 0.50-0.60
Oil 0.70-0.85
Heat Pump 1.50-2.00

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